The end is nigh for tax discs - how will it affect you?

The changes are being brought in as paper road tax discs are abolished – from 1 October, you no longer need to display your tax disc in your car windscreen as the system is moving online (see our Motoring MoneySaving guide for more ways to drive down costs).

You'll still need to tax your car and will receive a reminder notice as usual, but you'll only be able to check if a car's taxed via an online database.

The move was announced by the Government last year after more than 90 years of issuing drivers with paper tax discs.

The DVLA says getting rid of the physical disc will save the taxpayer £10 million every year. The vehicle licensing agency already has a digital record of who has paid for car tax and most enforcement action against untaxed car owners is done using an Automatic Number Plate Reader (ANPR). Police forces also have access to DVLA records.

According to the DVLA, September is one of the busiest months of the year for motorists to renew or apply for tax discs, so MoneySavingExpert.com explains exactly what's happening and what you need to do about it. See our full Q&A below for more, including a reminder to watch out for copycat sites that'll charge you more.

What are the key changes?

• Paper tax discs don't need to be displayed, but you still need to tax your car. If you have a tax disc that is valid after 1 October, you can remove it from your windscreen (although those in Northern Ireland still need to display their MOT disc). If your tax disc expires before 1 October, you'll need to tax it in the same way, though you won't be issued with a new paper disc.

• Car tax is no longer transferable from a seller to a buyer. If your car is sold, the buyer will need to buy road tax for it even if the existing tax hasn't expired. The seller/registered keeper will receive an automatic refund of any remaining tax from the DVLA. However you'll only be refunded full months, and if you paid the 10% surcharge to buy just six months tax, you won't get the surcharge back. You'll also be refunded for any remaining tax if your vehicle is declared off the road with a Statutory Off Road Notification (SORN)

• New direct debit payment option to pay car tax. If your road tax is due from 1 November onwards, you'll be able to set up a direct debit via Gov.uk from 1 October (5 October if setting up at the Post Office) for annual, biannual or monthly payments to be taken. However be warned that for biannual and monthly payments you'll pay a 5% surcharge. Once the direct debit is set up, payments continue automatically as long as an MOT is in place, unless you declare the car as off the road or if it's scrapped.

So how do I tax my car before 1 October?

You should have already received your renewal reminder and you can still tax it in exactly the same way. But you won't receive a new paper tax disc to display it in your windscreen.

How do I tax my car from 1 October onwards?

From 1 October you can tax your car online at Gov.uk, by calling 0300 123 4321, or by heading to your nearest Post Office.

To tax your car you'll need either your 16 digit reference number from your tax disc renewal letter – which is known as V11 – or the 11 digit reference number from your log book, which is called V5C.

Remember, avoid clicking on the first website you see on a search engine if you're renewing online. Shyster sites often charge an 'administration fee' for processing the service even though there's no administration needed (see our Copycat websites guide for more info on what to watch out for).

Will I still receive a renewal reminder?

Yes. You'll still be sent a V11 renewal reminder a couple of weeks before your car tax is due to expire.

How do I check if my car's taxed?

You can check online at Gov.uk. You'll just need to know the car's registration number and make.

What if I need my tax disc to apply for a parking permit or parking space?

The Government says all local authorities have been informed about the change, so you won't need a paper tax disc to apply for a parking permit or parking space.

I'm looking to buy or sell a car before 1 October – what happens?

When selling a car, both the seller and the buyer need to fill in the vehicle registration certificate (V5C). The seller then gives the buyer the new keeper slip (V5C/2) and sends the rest of the V5C to the DVLA. The buyer won't need to do anything as the tax will be transferred.

I'm looking to buy or sell my car after 1 October – what happens?

Both the buyer and the seller must fill in the vehicle registration certificate (V5C).  The seller will give the buyer the new keeper slip (V5C/2) and send the rest of the V5C to DVLA. 

The seller will automatically get a refund for any tax left on the vehicle (full months only) and the buyer will need to buy tax for the car. The tax will no longer be transferred.

What does the DVLA say?

A DVLA spokeswoman says: "The benefits of a paper tax disc have become redundant over time as DVLA and the police now rely on DVLA's electronic vehicle register and ANPR technology to check if a vehicle is taxed or not.

"That is why from 1 October motorists will no longer need to display a tax disc in their vehicle. They will still need to tax it, they just won't get a tax disc. Getting rid of the tax disc will save taxpayers around £10 million every year and remove administrative inconvenience for businesses and motorists up and down the country."